Sunday, January 16

Drugstoc is fixing a broken pharmaceutical supply chain


How much progress can a health provider make in the society, if it is constantly confronted with the challenge of a broken supply chain, chaotic distribution channels, epileptic delivery of quality medicines, and pharmaceutical supplies? Not much. Well, this is the reality that many healthcare providers in Sub-Saharan Africa have to deal with as they work towards an efficient healthcare delivery system. This is not to mention the counterfeit products that also get infiltrated into the fractured supply chain. You can well guess that their job becomes all the more complicated because of this.

However, Drugstoc is providing a cloud-based platform to get quality medicines at affordable prices, thereby boosting superior quality control systems with International Organization for Standardization (ISO) certification on Good Distribution Practice.

Drugstoc – a Nigerian-based e-health pharmaceutical distribution startup – is expanding access to quality medicines for healthcare providers, and rebuilding the supply chain financing in the pharmaceutical industry.

Co-founder and CEO of the Drugstoc, Chibuzo Opara recounted on the Nairametrics Business Half Hour that his first inspiration to start a business like this came when he lost a patient due to the non-availability of a pharmaceutical product needed for an orthopaedic surgery. Disturbed by the incident, he decided that he would want to provide a solution to the problem.

This led him to go pursue a degree in Economics Finance, and it was while at this that he met his co-founder, Adam Yehia who was pursuing a Masters degree in health service innovation at Maastricht University in Holland. They shared ideas about the problems in Nigeria’s healthcare sector, as well as possible solutions.

They returned to Nigeria in 2015 after their degrees and started Integra Health, a hospital management company offering consultancy service and providing healthcare management services to about 20 hospitals at the time. Again, they ran into the problem of sourcing pharmaceutical products, and decided that it was time to do something about it.

“It was a nightmare trying to source for pharmaceuticals and so, we decided it was time to provide a solution. Every business is about the right time and opportunity. Starting a business is crazy and running a business is difficult, but we knew we had to start from somewhere. “Fragile and resource-challenged healthcare systems require a radically transformative set of market-based strategies to expand access to healthcare. The DrugStoc way re-engineers the value chain digitally, improving and expanding access to healthcare at the same time,” Opara explained.

It took a couple of trials and errors before the team got a working and sustainable system, and finally opened the first fulfilment centre in 2017. DrugStoc was incubated under Stanford’s Institute for Innovation in Developing Economies in 2016 and emerged as one of the ten finalists for the Africa Netpreneur Prize Initiative, Jack Ma’s flagship entrepreneur program in Africa.

Drugstoc also won the award for the Technology Enabled Distributor of the year, at the Nigeria Health Excellence Award in 2019 and 2021.

Funding

Getting the funds to get the business from the idea stage and off the ground, was a mix of different sources. There was part bootstrapping from both co-founders and a couple of friends, as well as funds from early investors and clients who signed up during the pilot stage. Drugstoc also had some supplier credit which came in handy as they could get access to some products and supplies even without having the complete payment.

In 2019, DrugStoc won a share ($65,000) of  the inaugural $1 million Africa Netpreneur Prize Initiative by the Jack Ma Foundation, a pitching competition that rewarded 10 enterprises providing solutions for the continent’s critical issues. Drugstoc also received a grant from Bill and Melinda Gates.

This went on until some venture capital was injected into the business. In 2020, DrugStoc secured $4.4 million in a Series A funding round led by Africa HealthCare Master Fund (AAIC), Chicago-based venture firm Vested World, the German Development Bank (DEG) and high-net-worth individuals with a keen interest in tech-health.

How Drugstoc operates

Drugstoc operates a B2B model where they service registered hospitals, clinics, pharmacies and healthcare providers and link them to over 400 manufacturers. To get started, these clients have to register on the web page or on the app downloaded from the Playstore. The registration is completed when the healthcare provider submits the license for verification. Once done, they can login at anytime access and order over 7000 pharmaceutical products, Rare Medication, Speciality Items, Medical Consumables and even Small Medical Devices with ease.

In addition, Drugstoc is also providing Smart Payment Solutions & Inventory Financing for healthcare providers so that they can focus on providing efficient healthcare while having their systems run on automation. This service includes Inventory Automation, Smart Account Reconciliation, Point of Sale (POS) service, Business Growth Manager and a Virtual Wallet.

The startup already has over 3000 healthcare providers in its client base. While Drugstoc is concentrated in satisfying the Nigerian market and expanding into all the states, there are plans in the future to go on to other African countries and provide the same End-to-End Procurement Solution for other healthcare providers in Sub-Saharan Africa.



nairametrics.com

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